Osteoarthritis (OA) affects up to 1/3 of the adult population and is the leading cause of musculoskeletal disability in the industrialized world. OA is a progressive degenerative disease of the articular cartilage. Because cartilage lacks a regenerative ability, treatment for OA is primarily palliative. Chondrogenesis results from the condensation of mesenchymal chonroprogenitor cells (MCC) that proliferate and differentiate into chondrocytes. Adult bone marrow contains, within the mesenchymal stem cell population, mesenchymal chondroprogenitor cells (MCC) with in vitro and in vivo potential of becoming chondrocytes. This finding has brought closer the promise for the therapeutic usage of MCC to repair damaged cartilage. However, much of the basic biology of bone marrow derived mesenchymal stem cells remains a mystery and the molecular signals that convert them from the process of self-replication to that of chondrogenic potential and differentiation are unknown. In vitro studies have indicated that bone marrow derived mesenchymal stem cells cultured in high density pellets express a chondrogenic phenotype and TGF-beta is a potent chondroinductive growth factor. However, there is a gap in the information about the signaling through which TGF-beta determines these effects. Furthermore, in the cartilage formation process driven by BM derived MCC some of the pivotal stages of the chondrogenesis process such as MCC condensation, MCC growth and apoptosis have been poorly studied. The central hypothesis of this proposal is that in bone marrow derived MCC, TGF-beta signaling: 1) determines MCC condensation; 2) regulates MCC growth and apoptosis; 3) induces chondrogenic differentiation while inhibits hypertrophy. The proposal has been conceptually developed into a Specific Aim that is to define the Smad-dependent and Smad-independent signaling pathways through which TGF-beta determines the chondrogenic potential of MCC. To accomplish this specific aim proposal will combine structural biology, biochemistry, and mouse models genetically engineered to conditionally inactivate TGF-beta signaling in MCC. We expect that the results of this multi-faced experimental approach will provide greater understanding of the TGF-beta role in the chondrogenesis derived from bone marrow MCC. Understanding the role of TGF-beta in MCC biology will provide a framework for therapeutic manipulations to optimize the use of MCC in cartilage diseases.